so we're headed back to reality. today, just get out anden joy it. >> one of the things i'm seeing here, if you can get out to virginia today, ceremonial sword cutting of the marine corps cake. that does it this morning. stay tuned for fox news sunday. join us back here tonight at 10:00. >> chris: i'm chris wallace. a personal candal forces cia director david petraeus to resign. ♪ >> chris: we'll discuss the startling end to a brilliant career, and look ahead to the congressional investigation, of that terror attack in benghazi. with the chairman of the senate intelligence committee, dianne feinstein. it is a fox news sunday exclusive. then, the new year will bring higher taxes, and huge spending cuts. unless a divided washington cuts a deal. we'll talk with four congressional leaders, who will play big roles in trying to find a compromise. republican senator bob corker,

and congressman tom price. and democratic senator kent conrad and congressman chris van hollen. plus, president obama looks ahead to a second term, while republicans look to regroup. we'll ask our sunday panel about what both sides need to do, moving forward. all, right now, on fox news sunday. ♪ >> chris: and, hello, again, from fox news in washington. on veterans day. when we honor the military, for their service to our nation. and, sadly, we begin today with a dramatic fall from grace, of one of the most respected military men of this generation. cia director and retired four star general david petraeus stepped down friday after admitting to an extramarital affair. joining us to discuss that and upcoming hearings on the deadly terror attack in libya is the chairman of the senate intelligence committee, dianne feinstein, senator, welcome back to fox news sunday. >> thank you very much, chris. >> chris: in a statement friday

you said you understand petraeus's decision to resign, but that you wish that president obama had not accepted that. after more revelations, this weekend, do you still feel that way? >> i talked to dave petraeus twice on friday and he said to me, i've done an egregiously dishonorable thing and i need, now to do the honorable thing and i thought about it and, for me it is a heart-break, i mean, i am very, this is a truly bright man, a credible person. a great leader. and, could have really been a super transitional figure for the cia. this is very, very hard and i think he did the right thing. >> chris: now, you... >> yes. yes. >> chris:... accept this. >> you realize additional complications, which i did not at the time i spoke to him. i did he did the right thing and

i think the president really had no choice but to accept the resignation. >> chris: let me ask you about those additional complications, because it turns out the way the fbi found out about this is because paula broadwell, the mistress, was sending threatening e-mails to another woman, whom she regarded as a threat to her relationship with petraeus. what do you know about that relationship, between the other woman and petraeus? >> well, it is and fbi investigation, that is continuing. i read both the "post" and the times this morning and it is pretty well laid out, i think. i hate to discuss it, except to say there are a number of things that one has to consider, the first of which was there any kind of national security breach. to date, there was not. and, the fbi has briefed me, now i actually wish we had been briefed a little bit earlier. so that the full intelligence committee, one of the things

i've tried to do, chris, is bring both sides together. so, my vice chairman saxby chambliss and i share material and work together and that is a very important concept. with neither of us knowing ahead of time, all of this, obviously, comes as a big shock. and we are very much able to keep things in a classified setting, at least if you know you can begin to think and then to plan and, of course we have not had that opportunity. we begin our hearings on thursday. this is an inquiry, it's not a single hearing. there will be many different aspects of it. and, you know, obviously, general petraeus -- excuse me, director petraeus, is going to be part of the hearing process. >> chris: i want to get to the hearings in a second. i have to ask you, though, directly. do you believe -- have you been told this other woman was also in a relationship, an affair with general petraeus?

>> no. i have not been told there was an affair. what i was told is that there was somebody else that he knew and was close to, and, that mrs. broadwell sent these threatening e-mails to her, and, she was frightened and went to the fbi. oh, i can't believe it. but, that is what it is. >> chris: let's talk about the fbi. by law, they are supposed to inform your committee of any development of significance to the intelligence community. this clearly passed that threshold. is it true that you received no advance word of this? and are you going to investigate the fbi's decision not to tell you about an investigation that has been going on for at least weeks? >> the answer is yes. and yes. we received no advanced notice. it was like a lightning bolt. the way i found out, i came back

to washington, thursday night, friday morning, the director told me there were a number of calls from press about this. i called david petraeus. and as a matter of fact i had had an appointment with him, at 3 o'clock that afternoon, and, that was cancelled. and, so, then, when these questions came up, i obviously took the action myself, to try to find out and then, informed my vice chairman, and i talked to the director twice. this is very hard stuff. >> chris: and are you going to investigate why thebi didn't notify you before? >> yes, absolutely. i mean, this is something they -- that could have had an effect on national security. i think we should have been told. there is a way to do it. and that is, just to inform the chair and the vice chairman of

both committees, to -- this has happened before, not with precise, same things, but, none of the four of us have ever breached that confidentiality. >> chris: let me ask you, and you raised the hearings and we'll get into that in a moment. but, petraeus was supposed to testify in a closed hearing that your committee is going to held this thursday, about the attack on benghazi. now, because petraeus stepped down, his deputy, acting director replaces him and mike morel will testify in his place. one, will you insist on hearing from petraeus at some point and, secondly, do you think there is any link between his resignation and the events of benghazi? >> on the events in benghazi, and his resignation, absolutely not. and, i think if you really think this thing out, you will -- everybody will couple to that same conclusion. so, that is that. with respect to calling director the committee, er director that will be a committee

decision. the hearing will begin with the dni, jim clapper -- >> director of national intelligence. >> yes. and mike morel, who is now acting director of the cia and matt olson of the counterterrorism center. >> chris: i'll ask about that in a second. do you think you need to hear from petraeus. >> we may well and we may well ask. i think that is up to the committee. i think we should have this first hearing which is the way they wanted to set it up and then, the committee will make the decision. >> chris: all right, what -- let's turn to the hearing and as you say, it's not a hearing, but an inquiry. what are your biggest questions, your biggest concerns as you begin this inquiry into what happened in benghazi. >> well, my biggest concern is, there are literally hundreds of threat warnings in the material that has been accumulated. there were five attacks during the year. one prior attack on the consulate itself. the question i have, is, you

know, why want something done about it. there are many options. one is to recall the ambassador. sit down with him, have his personal assessment of security. see what you can do, and do it. the second is, to immediately beef things up in a major way. changes were made but the changes were not major. what is clear to me -- and i went to the memorial service in san francisco for chris stevens. the libyan ambassador to the united states spoke and twice during his remarks, he said, i am so sorry that we could not protect your consulate. which is a total admission that the libyan government was incapable of protecting our facilities. this raises a major question for the future. we have 285 embassies and consulates over the world. and, the threats pour in. what do we do? and i -- >> let me ask you, if i may,

senator, excuse me. direct: do you think that u.s. officials in washington had enough information beforehand, enough of these warnings, to beef up security before the attack ever happened? >> well, that is the purpose of our inquiry. and, that decision will be made by the committee. i have not had an opportunity get to go through what are thousands of pages. and, i -- you know, i want to do that. i want other members to do it. i don't want to jump to any conclusion. but, it would appear to me -- and this is just me -- that the five prior incidents in the year, which aren't intelligence, they are not threats. they are actual attacks on the british ambassador, on our consulate once before, on a number of other things, on the united states missions. now, that, to me, is sufficient intelligence to make a decision. now -- we want to see what the

extent -- extenuating circumstances are, that it wasn't beefed by us, if it couldn't be beachefed up by the libyans or we didn't close done the consulate. >> chris: second question, was there enough time between the first attack and the second attack the following morning on the cia annex, there was enough time to deploy u.s. forces to protect the americans there? >> my understanding is there was not. i can't be dispositive now, before we have these hearings and really hear the testimony on just that question. it is a pertinent question, an important question and it must be answered. >> chris: one more question: there were also the changing stories after the attack. changing stories from administration officials about what actually happened. take a look: >> do you believe that this was a terrorist attack. >> president barack obama: it is too early to know exactly how this came about. >> what happened initially was,

there was a spontaneous reaction to what had just transpired in cairo. as a consequence, of the video. >> yes. they were killed in a course of a terrorist attack on our embassy freeway. t >> president barack obama: the outrage over the video was used by extremists to see if they could also directly harm u.s. interests. >> chris: i'm asking you personally, not as the committee as a whole, how do you explain these shifting stories, and the president continuing to talk about the video, after the head of the counterterrorism center says that it was a terror attack. and do you think it had anything to do with politics, in the middle of the presidential campaign. >> i don't think it had anything to do with politics. i do think it had something to do with our assessment. and, you know, my view is very simple and very direct. the minute you know mortars were used, the minute you know rpgs

are used, it is either a terrorist attack or it is a military attack. those are the only two things it could be. what is a terrorist? it isn't necessarily all one thing. a terrorist uses the attack as a vehicle and we all know that now. therefore, it is pretty clear the minute mortars show up and rpgs show up, you have a terrorist attack. >> chris: why was the president a week later talking about the video, especially, when it turns out, and they knew in real time, there was never a protest to begin with. >> these things can be assessed into oblivion, too. and i go by prior incidents. prior incidents give me a good assessment of whether there is a high likelihood. so, that the assessment can be with confidence. and, i think that assessment could have been made earlier on, with confidence.

having said that, again, i have not seen these hundreds of threat warnings. i want to go through them and look at them. i want to see what -- see, this, now, comes down to our purpose. we have been very proud that over the time from 9/11 the stovepipes have been down, the intelligence has been better analyzed and it has been passed on. we have a national security branch of the fbi and a counterterrorism center and all of the above. now, the question comes, how does that all really work? this is a live incident. to show something went wrong in the assessment. and, i want to see exactly what it is and i don't want to be premature. i don't think you want me to be premature, either, chris. >> chris: no, i don't. >> good. >> chris:to tell us what you know and that's it. thanks as always for coming in, when you know more, please come

back and we'll follow your investigation into libya, every step of the way, thank you, senator. >> my pleasure, thank you. >> chris: up next, as we draw ever closer to the fiscal cliff, higher taxes and deep spending cuts, we'll ask four key members of congress if they can reach a deal, before the new year. ♪ all energy development comes with some risk, but proven technologies allow natural gas producers to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today.

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hikes and spending cuts will kick in next year unless the president and congress make a deal. we have invited four congressional leaders who will be at the center of any compromise, to discuss what is possible, and what isn't. senators bob corker and kent connco connecticco conrad, and, senator corker, let me start with you, how real is the cliff, can washington figure out a way in 51 days to cut trillions from the deficit or will you just get an extension and kick the can down the road. >> i certainly hope we don't kick the can down though road. we all know what the issues are, chris, we have had two dry runs already and nothing has changed. and, i hope at least we'll go substantially down the road towards solving the problem. people are conflating the fiscal cliff with fiscal reform and, we have been working a long time on fiscal reform.

and, i think we don't need to lose our eye on is the fact that that needs to be solved. i'm hopeful when i listen to the speaker and the president, i think there is room, i've said, from day one, the key to solving this, is medicare reform. if we can agree to medicare reform, i think the other pieces will fall in place. >> chris: senator conrad, there is some talk, among democrats, about going over the cliff, letting all the tax hikes kick in, and all the spending cuts kick in, and, blame it on the republicans. >> i don't know where you are hearing that. you certainty hear that from me. i have spent five years trying to put together a package in a bipartisan way to get us back on a sound fiscal course and, it is very clear, that we have a near-term problem. we have to make sure that we are doing everything we can to strengthen economic growth, and, we have a longer-term problem, that is an unsustainable fiscal course for the nation. that requires revenue reform,

which is bob corker talking about fundamental reform, we absolutely need it in our entitlement programs, medicare, social security. we need it in the revenue side of the equation. and, i hasten to say the soek piece shouldn't be part of a deficit reduction package but we need to address social security because it is headed for insolvency as well. >> chris: we'll talk about entitlements and spending in a moment. let's talk about taxes, which has gotten most of the attention, congressman van hollen, john boehner offered a compromise this week and he said, yes, i'm willing to put more revenue on the table, but, through closing deductions and ending loopholes, not through raising rates. can you accept a compromise as part of this whole deal, that doesn't raise the bush tax rate on the wealthy? >> well, here's the issue. how much revenue are we going to generate as part of the balanced package and i take my lead from simpson-bowles in their framework and they assume the

amount of revenue as if you started tax reform from a 39% rate. that is part of their built-in assumption and i'm all for doing tax reform. the issue is, from what starting point. and i think the simpson-bowles starting point, which assumes that revenue from 39%, is the right way to go to get the next they got in hitting the deficit reduction target and if what speaker boehner was saying, he is truly willing to get what we consider congressional budget office scorable revenue, then we can begin to work with one another. if what we are simply saying is what republicans used to say, we will lower rates on the wealthy, and, that is going somehow generate enough evidence -- >> he was clearly talking about closing loopholes and deductions. >> grover norquist doesn't think that. but the jury -- let me be clear. the tone was good. i think the jury is still out, on exactly what the substance of

what he said is. others may be able to clarify but he said something in a very artful way, which different people heard differently. >> chris: i want to ask you directly, yes or no. are you willing to accept more revenue if it doesn't mean that the bush tax cut has to be rescinded for the wealthy and it rises from 35 to 39% if they can make the math work. >> the issue is the math and i think the starting point should be going back to clinton-era rates and then proceeding with tax reform, as the speaker may have been talking about. if he was generally talking about eliminating revenues, to eliminating -- excuse me, loopholes as part of that -- >> congressman price, the president made one offer on friday, which is, let's -- right now, extend the bush tax cut rates for the 98% of the people that are making less than $250,000. he says, i'll sign it right away. take a look: >> president barack obama: let's not wait. even as we are negotiating a

broader deficit reduction package, let's extend the middle class tax cuts, right now. and i have the pen, ready to sign the bill, right away. [applause]. >> president barack obama: i'm ready to go. >> chris: now, democrats say that you, and i talk about republicans, won't accept that because you want to hold the tax cuts for the middle class hostage until you get what you want on tax cuts for the wealthy. >> chris, what we want or real solutions, house republicans want real solutions and to us that means that you have to have economic growth. a tax increase never created a new job in the country and what we need is economic growth and vitality and get the economy growing and get the jobs being created and that means more revenue -- >> let me ask you, i want to ask you directly. would you accept the piece-meal, let's just pass the tax -- extension of the bush tax cuts for the 98% of people under 250? >> it doesn't make any sense to us to raise taxes on job creators at this time of economic challenge. the equation is revenue, and spending. and, we can increase revenue

without increasing the tax rates on anybody in this country, we can lower the rates, broaden the base, close the loopholes, as you have discussed. and put in place pro-growth policies in energy and health care and the regulatory policy and address the spending. and the spending that has to be addressed is, medicare, medicaid and social security. >> chris: just so i can clear this up, you are not -- boehner seemed to be saying, i am going to close some of the loopholes and use some of the revenue, use some of the revenue from closing loopholes to cut the deficit. are you accepting that or not. >> i think that is the way we can reach agreement and i think what many of us are saying. that you can close the loopholes... >> chris: it is actually taking the money, tax expenditures, through loopholes and using it as a deficit saving. >> as long as you close the loopholes and limit the deductions and the credits, you can lower the rates and broad then base. that is the formula for a solution. and it is a real solution. >> chris: so, senator corker, you have a draft plan you have been circulating to a number of

members of the senate. there is a deal here. >> i think there is a deal. the ying and yang of this, there has to be revenue. i haven't met a wealthy republican or democrat in tennessee that is not willing to contribute more as long as they know we solve the problem. so, the ying of revenue, we understand and i think there is a good, pro-growth way of putting that into place so you are getting revenues from people like me and other folks. that make above x dollars. but what you have tied to that is true entitlement reform -- >> less than a minute. senator conrad. i mean, is there the basis of a deal here? no, it is not raising the bush tax rates. but, it is tax reform, where you close the loop hoholes and will work? >> it would.

bow simpson-bowles closed off preferences, and exclusions, deductions, and it equalized capital gains an dividends. if you really want to go to where many of us the tax code is unfair, you've got people who are paying very close, an effective rate, the top rate of 35% and people who are much, much wealthier paying an effective rate of 13 or 14%. that is really unfair. how does it happen? it large lly happens because the is a 20 point differential between capital gains and ordinary income. 15% for capital gains and dividends and 35% for ordinary income and the differential i don't think is justified. >> chris: i know you have been chomping at the bit to get to spending and entitlement reform which has to be part of any deal. congressman van hollen, a year ago august, when boehner and obama were videoed involved in talks, grand bargain that blew

up, the president talked about raising the eligibility age of medicare and slowing the cost of living adjustment for social security. could you accept that? >> well, i'd have to look at the overall deal, chris. and, we have already made significant reforms to medicare. through savings and there is a complication on the issue, the supreme court decision that said some states don't have to cover people on medicaid. could leave lots of individuals in that age group vulnerable. and so that is a major complicating factor as we move forward. but, look, i'm willing to look at -- and i think democrats, clearly the president, is willing to look at everything... >> chris: major entitlement reform. >> yes. everyone has a different meaning of major entitlement reform. after all the affordable care act made significant changes in savings as part of the medicare program. of course, during the last campaign, seriously, there were a lot of ads blasting democrats for what was serious reform with respect to medicare. the difference being that we

look for savings by changing incentives within the program as opposed to savings to medicare, simply by transferring those costs onto beneficiaries. that is note way to go. that kind of voucher plan in my view. >> chris: congressman price, it brings me to obamacare. speaker boehner was asked this week whether the republican drive to kill obamacare, is dead. here's what he said: >> it is pretty clear the president was reelected. obamacare is the law of the land. >> chris: question: do most house republicans, do you agree with speaker boehner, repeal of obamacare with this election, with his re-election, is dead? >> no. as a physician i can tell you that the reason -- we're not opposed to the president's health care law because of the election, we're opposed because it is bad policy and bad for the patients across this land. we actually must get a handle on this spending in this country and in order to do that, it has to be through medicare and medicaid reform an social security reform, all three programs under current law are

destined for fewer. we need fundamental reforms to save and strengthen and secure the programs for this generation and, future generations, that is what really -- >> the election, yes, you still have the majority in the house but you lost the election on the presidential level, and you will not kill obamacare for the next four years. >> what at the election said is that the american people don't want unified government here in washington. they want divided government which means we have to get together and solve these remarkable challenges that we have, but they have to be solved with real solutions. they can't be solved with things that don't solve the problem and this is what we have been doing in this town for years and years. and that is not what the american people want. >> chris: let me go to the two senators to end this. i come away from this, yes, there is a little, but a lot of the same old arguments, are coming up. will we go over the cliff or not? >> no. >> chris: is that because... kicking it down the road -- >> i think a travesty for your country is the reason we don't

go over the cliff, would be we kick the can down the road. we know what the problems are and we have been through two ground runs and, let's make a huge down payment on the problem and, this is going to take years of work. so, look, i'm optimistic, i am... >> chris: do you think there is the basis for a deal. >> i think there is a basis for the deal. because i think finally, democrats are willing to accept -- and i don't mean it pejoratively, they know that republicans really are willing to put revenues on the table if we can do it in a pro-growth way and there is a way of doing that and you saw the "washington post" editorial this morning. laid out $750 billion, an easy way to have getting there. there is a way on the revenue side and the question is can we come to terms on the entitlement side and by the way, when you deal with entitlements, you really don't do anything that deals with the economy in the short-term. so, it is the very best way, $27

trillion problem, exists right now with medicare, unfunded liabilities and that is where the focus needs to be and we can get to the appropriate revenue mix if we do that. >> chris: senator conrad, lame duck, in the lame duck session, as your final act before you leave office, is there a basis for a deal here? >> i absolutely believe there is. you can't settle every detail in these next few weeks. what you can do, is agree on a framework agreement that sets out for the committees of jurisdiction how much they need to save, how much money needs to be raised. what we can also do, is have a significant down payment, so the markets understand we're serious about that and what we can also do is have it back stopped so if the committees of jurisdiction did not perform, there would be a real consequence. >> chris: that is the fiscal cliff, what was supposed to happen here. >> the difference is, the fiscal cliff was designed not to happen. that is, the sequester across the board cuts, $2.2 trillion,

defense, nondefense was designed to be so onerous nobody would accept it and we need as a backup, something that would be good policy, if the operating committees didn't act. >> chris: i have to leave it there, thank you all for coming in and we'll be watching every step, of the next 51 days. good luck. >> thanks. >> chris: up next, president obama prepares for four more years in the white house, we'll ask our sunday group what they will be looking out for. ♪ this country was built by working people. the economy needs manufacturing. machines, tools, people making stuff.

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>> president barack obama: i wam looking forward to reaching out and working with leaders of both parties. to meet the challenges we can only solve together. we reducing our deficits, reforming our tax code, fixing our immigration system, freeing ourselves from foreign oil. we have more to do. >> chris: that was the president in his victory speech promising to work with congress to get big things done during his second term. bill kristol of the weekly standard, former senator evan byah, syndicated radio talk show host laura ingraham and kirsten powers from daily beast web site. bill, what remember the chances, realistic chances the president can work with republicans in a second term, to solve the nationnatio nation's problems. >> there is a good chance he'll pass major consequential legislation in the second term and people like me won't like it much and, he won re-election and

he is the fourth president in the last president to win more than 50% of the vote, twice, roosevelt, eisenhower, reagan and obama and it pains me to say that. but, it is a fact. the democrats picked up seats in the house and senate and the president is in good shape, and, the republicans in the house will be able to get some concessions and compromises, but i think there will be a deep budget deal next year, and obama-type budget deal, and election have consequences. >> chris: let me asks about that, senator bayh, the country voted for divided government and gave him a mandate and, house republicans a mandate and as a moderate democrat what is dhee to how obama finds a way -- the key to how obama finds to way to work with the g.o.p. and not have two more years of gridlock. >> the president needs to move to the middle, particularly on fiscal issues and i have been as pessimistic as anybody about gridlock in washington but i am modestly optimistic here. the president has more flexibility to stand up to his

base on things liken entitlement reform and mitch mcconnell said the priority was that he be a one term president and that is off the table and the president will think of his legacy, getting things done and not just staking out positions and the republicans need to keep in mind they lost voters. and, the president way be willing to have spending reductions versus tax increases and a pro-growth tax reform package, you can get something done there. >> chris: laura, presidents' second terms are notoriously difficult and, the president won reelection but didn't give as much of an agenda for a second term during the campaign, what do you expect from him? now that he no longer has to worry, ever again, about re-election. >> well, i think, it is instruct tiff to go back to 2010 when the republicans had the great midterm election and for republicans thinking compromise is the answer for their political future i would say, think about what president obama did.

actually ended up helping him win a huge re-election victory. he decided not to moderate and not to necessarily compromise, on pretty much any issue, and decided to double-down on liberalism and, he marketeded it in a new way and sold to it latinos and found inflection points and did it masterfully with the re-election team and i think republicans and conservatives should figure out what they stand for. >> chris: wait a second. we are -- >> i got that. my answer is i think the president is going to go full steam ahead with his agenda which is a socially progressive agenda and we heard about compromise, and he got it the way he wanted it, my way of the highway and you will see that again. >> he extended the bush tax cuts. >> he had to do that. even democrats were urging him to do that. but now the second term without any check, i think obama doubles down on all the things he really wants to do. and i think he rams through an amnesty, immigration reform,

whatever you want to call it and i think he goes a lot further towards carbon tax, toward all sorts of environmental regulations that are waiting, there is a huge regulatory framework that is about to be implemented. they have been holding up on it and the second term is going to be regulation heaven, for those -- >> let me bring in -- >> let me jump in here. >> chris: kirsten. >> you laid out, the two biggest things that will happen if obama has his way, immigration reform but the reason immigration reform will happen is because of what bill said, there are republicans that are chastened and are going to work with him on it and, otherwise it wouldn't happen, that will be a major accomplishment. that he will try to get done and you are right on the carbon tax as well. the climate change is going to be a major issue. >> chris: do you agree with laura he will not move to the center and in fact will double down on liberal -- >> laura and i will never agree on that, but i think he's fairly moderate. >> on what issues? what issues is -- >> he did compromise on the tax

cuts, which is a major issue for democrats. >> one thing. ingrid lock. >> and the health care legislation, the public option was taken off the table. >> chris: before the segment ends i want to talk personnel, we have the shocking resignation friday of david petraeus and i want your thoughts on that and also, the whole national security framework. secretary of state clinton, secretary of defense panetta indicating they want to step down. what does it mean in terms of who will replace them and any possible change in obama policy? let's start with petraeus. >> listen, a terrible end to a horrible week. and, i really -- i don't know anything more than anyone else does. you know, i think the president will... when things are wrong we can put things on the back burner and secretary of state an secretary of defense and, wait 6 to 9 months but major decisions have to be made about syria, 30,000 people have been killed and we are losing influence by

not being more forward leading an afghanistan. what is the president going to do, the troops there, and, the vice president said we're getting out in 2014, period and the policy is more responsible, in my view to get a force there, advisory support force there afterwards but i don't know, will there be support on the hill, republicans and democrats think we are in slow motion defeat in afghanistan, will people support sending more troops over there? i'm not sure. he has to make a decision, does he want to get out of the war or avenue a favorable outcome, and he'll avenue a busy foreign policy agenda in the next six months. >> chris: we are running out of time, petraeus in specific and national security in the second term... >> the same with david petraeus, it is tragic, a patriotic american and it is unfortunate and fortunately for us, we have a deep bench in the national security force arena and the president will make a smooth transition there. the big issue the next 12 months and it involves the cia is we are coming to the moment of

truth in iran's nuclear program and face a fork in the road, there are no attractive alternatives but there are profound consequences depending on the path we take and that will be the major issue. final thing, in the last question, he's going to compromise on legislation, because he has to. he will, as laura said be, more progressive on the regulatory front because he can. >> chris: laura. >> the petraeus thing is tragic, that is a given but we have real questions, the head of our intelligence in the entire country, sending personal e-mails after he named cia to apparently this gal, paula, after the report is she had broken off the relationship and he was sending scores of e-mails, some say thousands from his personal account and for eric holder, if he was the one who knew about it, to have not brought it to the attention of the president of the united states, i think questions have to be asked, was it not brought to the president's attention if that is the case because of the political concerns? national security and politics,

which comes first? our country is on the line. our security is on the line. and, our cia director? apparently was distracted enough by whatever this was, he was sending scores and scores of e-mails from a personal account? this is insanity and that is -- >> what do you -- >> we have a congress who better investigate t get his tail up on capitol hill. tragic, yes -- >> more important for the american people -- >> as confirmed, all the other stories that are being told about the women. i mean... >> the "washington post" and "the new york times" had pretty startling reporting. >> what i'm saying is people need to focus on what she is talking about, which is if the e-mails are sent by aren't we talk about that -- >> national security. >> her biceps. >> who cares about that. national security concerns of the country. >> chris: we need to take a break here. it will be a very calm, relaxed second term. also here at "fox news sunday" and when we come back after a

tough election night for republicans, how does the g.o.p. come back? ♪ i'm a conservative investor. i invest in what i know. i turned 65 last week. i'm getting married. planning a life. there are risks, sure. but, there's no reward without it. i want to be prepared for the long haul. i see a world bursting with opportunities. india, china, brazil, ishares, small-caps, large-caps, ishares. industrials. low cost. every dollar counts. ishares. income. dividends. bonds. i like bonds.

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and not a penny of it comes from taxpayers. ♪ >> it is clear as a political party we have some work to do. and i think the principles of our party are sound. how we talk about the -- who we are as a party is clearly a conversation that will continue. >> chris: that was house speaker john boehner, acknowledging republicans have to retool after a disappointing election. and we're back now with the panel. laura, how much trouble is the g.o.p. in? >> well, it depends on how they react to this. if the reaction to the election is let's dig into core principles and remake them, the g.o.p. will lose more seats in 2014, if it is a bidding war with republicans and this and

that group, latinos and women and we'll give you more stuff and give you amnesty-plus, to keep in line with panel-plus, it will not work but the republicans have to take a lesson from -- i hate to bring it up -- when goldwater was shellacked in 1964, the conservatives got together and said we'll figure out how to sell this idea of economic conservatism and the conservative framework to new voters and they went into the south and transformed mississippi and alabama and all of these places where people never voted republican before. it took time. and it took a lot of introspection, but it wasn't them deciding, oh, our entire framework of ideas is wrong. it depends how they react. >> chris: let's look at the exit polls which point out the challenges republicans face, let's put them up on the screen: republicans lost women, by 11 points. hispanics, 44 points. and young people, by 23 points. what does that tell you? >> well, i think, first of all,

losing women by 11 points isn't that huge, because, they lost them by 13 points last time and it is important to look at the swing states, there was a much bigger swing and i think if you want to look at something, recently, that happened, similar to this, i think 2004. and that is what this reminds me of, the day after democrats, you know, absolutely falling apart, my gosh, we have this new conservative majority, how will we change to attract them, and, i think there is a little bit of an overreaction on the right. except for immigration issues. and i think because of the demographics of the country, that the republicans are going to have to figure out a way to attract the hispanic vote and do a better job with women but they actually could win an election still with that gender gap, it is just like i said, if you look more at the states where they -- the obama administration bombarded women with messages, you saw a much bigger gap. >> chris: it is interesting,

because i was thinking of 2004 as we'll, the pendulum swings back and forth and after the 2004, which bush obviously had a lot of issues and, still won, the democrats were disspirited and four years later came roaring back, what do republicans need to do. >> two issues i'm thinking of, number one, four years ago, 2008, when some parts of the democratic party said this was a vote for a new progressive era and more left-leaning government and turned out that that was not quite the case and our party needs to be fairly modest then mandate we take away from this and governor from the center-out, progressive center, one and two, i'm thinking of 1988 from the republicans' perspective. democrats had lost two elections in a row to ronald reagan. and what did we do? nominated michael dukakis, a fine man but a liberal from massachusetts and the internal struggle republicans will go through, they have to be true to their principles, particularly

on economic and fiscal issues but when they embrace the far right social agenda it drives off young people and it does alienate single women and suburban women... >> senator, i mean, your state -- >> what i'm saying -- >> republican governor. >> chris: wait, wait, wait. >> one last thing, please continue to nominate people for public office who talk about women being raped and that being god's will. >>... actually a great -- won by only five points, and republicans should not kid themselves, they lost 25 to 33 senate seats and republicans gained back the two states easy to gain back and no other new state at the presidential level and obama had a tough economy and, the glow was gone from the first temrm and republicans los the national house, and redistricting and democratic voters are more concentrated in more districts, it was a bad year and the youth vote, 60-40. i believe republicans that he have right policies for the future, i believe the democrats

that are -- >> republican, too -- >> you need have open debate, i believe and i don't think the answer is to be more moderate or more conservative, the answer on some issues is going to be fresh thinking which will be taken as moderate and some issues actually to be more conservative. i think we have a huge middle class problem. they are the particular nominee, the republicans had for -- unfortunate in that respect, four years after a huge wall street crisis, and nominate someone from wall street. and i think, honest debates, fresh thinking, leadership in the republican party, and the leadership in the conservative mutual has to full back, let medium promote new ideas and don't scream and yell, it won't ruin the country if we raise taxes, on millionaires and i don't understand why republicans don't take obama's offer to raise taxes for everyone above 250,000 -- make it a million and, the millionaires, half of whom voted democrat and half of them live in hollywood -- >> this is the second election

in a row where it is fair to say, republicans squandered a really good chance to take over the senate. i mean, by all mathematical rights they only had ten seats to defend and democrats had 23. because they nominated people, who were strong enough to win in primaries but too out of the mainstream to win in general elections, does the republican party have a tea party problem. >> a republican establishment problem, and, the establishment nominees were nominated in florida and virginia and north dakota and montana and lost and sitting congressmen who had the same stale establishment republican message and we had some -- some tea party problems and some establishment problems, and, basically, they should get away from either defending the establishment or defending the tea party and try to find -- >> we have 30 seconds. >> okay. we've heard the tea party thing and heard it in 2006, and the far right, it was called then and we had bad candidates,

richard mourdock, and, how did scott brown lose in massachusetts and, lose the north dakota senate seat? because of the tea party, if it wasn't for the energy they brought to the fore, republicans would be in a disaster now. it doesn't mean they have to nominate great people, they are good about that but the tea party, how many times can they be blamed for moderates losing seats in come on. >> chris: thank you panel, see you next week, don't forget to check out panel plus where our group picks up with the discussion on our web site, web foxnewssunday.com and we'll post the video before noon eastern time and follow us on twitter. up next, a follow-up to last week's show. ♪ change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus

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>> chris: before we go a follow-up to our interview last week with obama senior campaign strategist david axelrod, we asked about a bet he made offering to shave his mustache if the president lost minnesota, pennsylvania or michigan on election night. >> chris: somehow secure is your mustache today? >> the next time we see each

other, chris i guarantee you you that mustache will be right where it is today and, it has been here 40 years and you know how serious a bet that was. >> chris: the president won all of those states but axelrod attracted so much attention he had another idea, this week. he and his wife, susan have a daughter named lauren, who has epilepsy. and they are key figures in citizens united for a research in epilepsy or cure. now, david promised to save his mustache if folks will donate $1 million in total by the end of the month. it is a good cause and you can find for information at cureepilepsy.org and let's face it, it would be fun to see him without his mustache. that's it for today, have a great week and we'll see you that's it for today, have a great week and we'll see you next "fox news sunday." captioning by, closed captioning services, inc. bla where others fail, droid powers through.

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